Jefferies Upgrades Equity Residential, Ventas to Buy, Cuts DDR

By Michael Aneiro

Jefferies kicks off the new year with some rating actions on several real-estate investment trusts. From Jefferies today:

Upgrades Equity Residential (EQR) to Buy from Hold, ups price target to $64 from $59. .”We believe EQR’s acquistion of ~60% of Archstone greatly accelerates EQR’s transformational story to a REIT focused on owning very high quality assets in better markets. As such, we believe the stock should command a higher multiple to better reflect the repositioned portfolio.”

Upgrades Ventas (VTR) to Buy from Hold, increases price target to $72 from $66. “Given macro uncertainties heading into 2013, VTR offers investors a nice mix of defense and growth. A solid acquisition outlook, and another year of strong results from the senior housing operating portfolio also suggests upside to 2013 consensus estimates.”

Downgrades DDR Corp. (DDR) to Hold from Buy, cuts price target to $17 from $19. “While we remain fans of the DDR story (and most especially the management team), we are downgrading the stock to a HOLD primarily due to the fact that a key catalyst (i.e., attractive debt refinancing simultaneous with improving balance sheet strength) has now occurred. In our opinion, the stock is also now fairly valued after the strong 28% run the stock experienced in 2012.”

Downgrades Senior Housing Properties (SNH) to Hold from Buy, keeps price target at $24. “We see increased risk to the SNH story in 2013 given that the company’s RIDEA platform will likely take time to stabilize and require significant capex, which we believe could put added pressure on SNH’s dividend growth trajectory. That said, we are still positive on senior housing fundamentals as a whole.”

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